Gold and Silver Prices Surge Amid Geopolitical Tensions and Safe-Haven Demand

Gold and silver prices continue to surge as fresh triggers emerge from the US economy. In the international market, gold trades at over $4,300 while silver is trading at over $63. On Monday, gold prices rose 1% to over $4,340 per ounce, approaching an all-time high, boosted by prospects of further US interest rate cuts. Gold has gained over 60% year-to-date, on course for its largest annual gain since 1979, powered by sustained central bank purchases, high ETF inflows, safe-haven demand, and a shift by investors away from sovereign bonds and currencies. Silver rose beyond $63 per ounce on Monday, on track to establish new record highs and increase by about 120% year to date. The increase has been fueled by tightening supply, strong industrial demand, and the metal’s inclusion on the US key minerals list. The recent surge in prices of gold and silver is largely attributable to heightened geopolitical tensions and uncertainty over global growth, which have boosted safe-haven demand, the finance ministry said on Monday. In a written reply to the Lok Sabha, Minister of State for Finance Pankaj Chaudhary said domestic prices of precious metals like gold and silver are primarily determined by their prevailing international prices (in US dollar terms), the exchange rate of the Indian rupee against the dollar and applicable taxes/tariffs. “The recent surge in prices is largely attributable to heightened geopolitical tensions and uncertainty over global growth, which have boosted safe-haven demand, including substantial gold purchases by central banks and major institutions worldwide,” he said. He was replying to a question related to an increase in gold and silver prices. Chaudhary further said that while prices of gold and silver have witnessed a rising trend in the current year, it may have differential effects across states or population groups depending upon the degree of socio-cultural and economic reliance on these precious metals. They serve a dual role — not only as a consumption item but also as an investment avenue, as they are considered safe assets for hedging against uncertainties. Thus, an increase in the price of gold or silver positively influences household wealth, as the notional value of existing gold or silver holdings appreciates, the minister said. For prospective buyers, he said, purchases represent a shift from one form of asset (cash) to another (gold or silver), whose value may appreciate over time. He emphasised that the prices of precious metals are determined by the market and the government is not involved in the price fixation. He also added that RBI and government regulation of bullion imports through nominated agencies, banks and refineries improves traceability, reduces grey market channels and helps domestic prices more smoothly track global benchmarks rather than react to shortages or speculative spikes. India imported gold worth USD 26.51 billion and silver worth USD 3.21 billion till September this fiscal. The gold import bill was USD 58 billion and USD 4.82 billion for silver during fiscal 2024-25. The Indian currency is backed by the assets maintained by the RBI in accordance with the RBI Act, 1934, which requires the RBI to hold gold coins, gold bullion, foreign securities, rupee coins and rupee securities to such aggregate amount as is not less than the total currency issued. As on March 31, 2025, the Reserve Bank of India held 879.58 metric tonnes of gold as compared to 822.10 metric tonnes as on March 31, 2024, reflecting an increase of 57.48 metric tonnes. These gold holdings contribute to strengthening confidence in the Indian Rupee and the overall external stability of the economy, the minister said. The closing bullion rates on Monday were – 1 Gm Gold 22 Kt – Rs 12,720; 1 Gm Gold 24 Kt Rs 13,877; Silver rate Per Kg: Rs 2,0,2000. Gold price in India surged by Rs 4,000 to touch an all-time high of Rs 1,37,600 per 10 grams in the national capital on Monday, tracking firm global cues, according to the All India Sarafa Association. The precious metal of 99.9 per cent purity had closed at Rs 1,33,600 per 10 grams on Friday. “Gold prices scaled even higher as international spot gold surged towards the USD 4,350 zone, triggering a strong rally in the domestic market,” Jateen Trivedi, VP Research Analyst, Commodity and Currency, LKP Securities, said. He added that the yellow metal reflected the global strength with a sharp gain, touching a fresh lifetime high. Gold prices had earlier appreciated by Rs 3,200 to touch an all-time high of Rs 1,34,800 per 10 grams on October 17. “The move was driven by renewed safe-haven demand and expectations around upcoming US economic data, including non-farm payrolls and the Core PCE Price Index scheduled this week, the focus has firmly shifted to US macro cues, which are expected to keep volatility elevated,” Trivedi added. During the current calendar year, gold prices have surged Rs 58,650, or 74.3 per cent, from Rs 78,950 per 10 grams on December 31, 2024. So far in this year, silver prices have skyrocketed by Rs 1,09,800, or 122.41 per cent, compared with Rs 89,700 per kilogram on December 31, 2024. Silver imports in November 2025 jumped 125.40 per cent to USD 1.07 billion. “Spot gold trading with a positive bias as the Federal Reserve not only cut the rate into elevated inflation, but it is also adding liquidity to the system by buying Treasury bills,” Praveen Singh, Research Analyst, Mirae Asset ShareKhan, said. Prices of the yellow metal on Monday crossed Rs 1.35 lakh per 10 grams in the national capital. Commenting on the data, Commerce Secretary Rajesh Agrawal said the dip in imports has brought down the country’s import bill. Switzerland is the largest source of gold imports, with about 40 per cent share, followed by the UAE (over 16 per cent) and South Africa (about 10 per cent). The precious metal accounts for over 5 per cent of the country’s total imports. The imports from Switzerland dipped by 82.54 per cent to USD 837.7 million in November. In April-November this fiscal, inbound shipments dipped 13.32 per cent to USD 16.22 billion. India is the world’s second-biggest gold consumer after China. The imports mainly take care of the demand by the jewellery industry. (With PTI Inputs)